Montana diocese files for bankruptcy over sexual abuse claims

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HELENA, Mont. (CNS) — The Diocese of Helena filed Jan. 31 for bankruptcy protection in the U.S. Bankruptcy Court for the District of Montana over sexual abuse claims dating back 60 years.

The diocese said in a statement it took the action to resolve 362 claims of abuse of minors by diocesan priests, religious community priests, women religious and lay workers that have been filed.

Under the terms of the bankruptcy protection sought by the diocese, there will be a settlement of $15 million to pay out to those victims that have already been identified, and a fund of $2.5 million to pay ongoing court costs and future bankruptcy proceedings as well as compensation to any victims who come forward later.

“The statute of limitations doesn’t really fly in a lot of ways,” diocesan spokesman Dan Bartleson told Catholic News Service, “once a jury hears what was going on in a lot of people’s lives.”

Some of the diocese’s 16 insurers — from whom it is expecting to pay out the claims — have sued the diocese, saying they should not have to pay damages for abuse that occurred before those policies went into effect.

Complicating the situation is the western Montana diocese’s financial state. “There’s been a major reduction in staff, curtailed parish building projects,” Bartleson said. “The reality is that we’re functioning at a bare minimum. The (diocesan) staff is in a major transition.”

Diocesan offices were closed Jan. 31, not because of the bankruptcy, but as “a day devoted to reorganization, taking on newer responsibilities,” Bartleson told CNS, “so business as usual isn’t really possible.”

Helena becomes the 11th U.S. diocese in the last several years to have filed for bankruptcy protection to settle sex abuse claims against clergy, religious and laypeople working for the church. Several of those dioceses have since emerged from bankruptcy include Tucson, Ariz., Davenport, Iowa; Spokane, Wash.; Wilmington, Del.; and Portland, Ore.

“On behalf of the entire Diocese of Helena, I express my profound sorrow and sincere apologies to anyone who was abused by a priest, a sister, or a lay church worker,” said Bishop George L. Thomas of Helena in a statement. “No child should experience harm from anyone who serves in the church.”

Bishop Thomas added, “None of those who have been credibly accused remain active in ministry at this time. In fact, the majority of those accused have died.” He noted the diocese also took responsibility for claims involving members of religious communities who have served here. One exception was the Ursuline Sisters; negotiations, a diocesan announcement said, were “inconclusive” and they are not part of the settlement talks.

The Helena Diocese entered into confidential mediation before the bankruptcy with victims and their attorneys, resulting in an outline for a proposed settlement with the victims and the diocese’s insurance carriers, details of which were still being worked out by all sides.

The process of obtaining bankruptcy court approval included the opportunity for victims and creditors to vote on the proposed settlement, the diocese said.

The Associated Press reported that some of the diocese’s 16 insurers — from whom it is expecting to pay out the claims — have sued the diocese, saying they should not have to pay damages for abuse that occurred before those policies went into effect.

AP said two lawsuits filed in 2011 on behalf of victims claimed clergy members groomed and then abused the children from the 1940s to the 1970s. They claim the diocese shielded the offenders and knew or should have known the threat they posed to children.

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Contributing to this story was Mark Pattison in Washington.

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